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Ukraine’s finance minister said key financial support from the West was “not charity” but “self-preservation” to defend democracy as his country grapples with mounting costs of repairing power and heating infrastructure damaged by Russian attacks .
Serhiy Marchenko also told The Associated Press in an interview in Kyiv on Thursday that he believed EU officials would resolve the dispute with Hungary, which blocked a key 18 billion euro ($18.97 billion) aid package, and would compensate Ukraine. Much of the looming budget shortfall.
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Marchenko said financial support for Ukraine was insignificant compared with what developed countries spent to deal with emergencies such as the 2008 global financial crisis and the COVID-19 pandemic. He added that the freedom and security the money supports goes far beyond his country’s struggles.
“Supporting Ukraine is not charity,” Marchenko said. “We are working to protect freedom and democracy in all (this) civilized world.”
He said damage from Russian missile attacks on civilian infrastructure such as power stations would account for 0.5 percent of next year’s economic output, adding to the burden as Ukraine tries to cover a budget deficit equivalent to $38 billion. The World Bank expects Ukraine’s GDP to be just over $200 billion in 2021, so losses could amount to around $1 billion.
Ukraine needs external funding to cover the budget deficit caused by the war. The cash or loans help it avoid central banks printing money to meet basic needs like paying people’s pensions, a practice that risks fueling already painful inflation.
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The proposed EU loan worth 18 billion euros, with major US support and possible help from the International Monetary Fund, would cover a large part of Ukraine’s budget shortfall. But the European package has been stymied by Hungary in a dispute with Brussels, which fears a democratic backsliding and possible mismanagement of EU funds in Budapest.
“Of course, it worries us that it will block or delay the flow of funds to Ukraine,” Marchenko said. “But I believe that the wisdom” of EU officials “can solve all problems, and together they will join Ukraine’s struggle for independence.”
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